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22 June 2023: Expect the unexpected

Contrary to the usual MO, I want to look at the wider market before trying to make sense of milk powders. First of all, the daddy of world proteins, soya; US crop condition has fallen its the lowest level since 1995 at this early stage of development, due of course to lack of spring rains over the soya belt. Adding to that picture is slow export from Argentina’s principal export hub, unsurprising given the lower soya crop figure there. But Brazil’s mega 2023 soya crop will fill any S American shortfall and some, so any rains in the US soya belt will likely send the price south.

Soya oil and meal have done a do-si-do this week, with meal following beans sharply higher, whilst soy oil shed 10%, more to do with stabilised crude oil markets and following a slightly weaker palm oil market.

I can’t put off any longer admitting that I don’t know what is going on in milk powder markets. The bare facts are that skim milk has reduced by €30 this week (-1.35%) and sweet whey by a whopping €40, which is over 6% down. That is what reported trades are posted at in the headline Dutch market, but every processor, trader and industry pundit is howling about higher prices! The other bare fact is that sweet whey is now getting on for €150 per tonne below cost of production, so the moment processors can see the warehouse floor, they will likely recoup their losses, and some.

Sterling has seen a classic ’sell on rumour, buy on fact’ sting, as the unprecedented 0.5% interest rate rise just announced by the BoE has seen the heady heights of €1.18 give way to €1.1615 straight after the announcement. Contra trading, of course, but perhaps the prospect of an induced recession is weighing more heavily than the higher returns of holding sterling.

BDC agri is the UK broker for Lacto Production milk and whey powder products.

For further information and prices, contact Greg Dunn on 01206 381521 or


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